Published on March 15, 2014
Setting up a crowdfunding campaign (from my personal experience) By Craig Thomler @ BarCamp Canberra 15/3/14
What is crowdfunding and why use it? Getting lots of people to each contribute a small amount of money to meet a large expensive goal It’s not new - • charities essentially crowdfund • And so do governments (taxation)
Why use crowdfunding? To raise money and build support for… • creating a work of art • developing news stories • funding an FOI request • creating a product or service... • and more! But WHY? • It is a way to raise money that doesn’t ‘cost’ equity or require hard to get loans
The language of crowdfunding • Campaign / project – what is being crowdfunded • Goal – the target amount of money to raise • Back – the act of supporting a project with money (contributors are often called backers) • Pledge / contribution – the money a contributor promises to give to a project • Reward – what the contributor gets for their pledge (Reward Tier – a set of rewards)
What can contributors get? • Involved in creating something new • An actual product or service • Exclusive access to limited edition material • Right a wrong / fill a gap • A good feeling helping someone
Some examples of crowdfunding
Some examples of crowdfunding
Some examples of crowdfunding
Developed into this…
Choosing a crowdfunding platform • Many are out there Australian:
Consult people who’ve been there! • People can be generous in sharing their experience… • Thanks Andrew (LifX), Josh (Motion Synth), Saskia (KidsGoMobile) & Rob (BuildAR)
Supports your jurisdiction • Local currency • Meets local legal requirements • Understands the country’s culture
What type of product / service? Choose crowdfunding platforms which have large communities & support for your type of product/service • Artwork • Movie • Game • Product • Service
How do you want to raise money? • All or nothing (must meet a goal amount) • Take what you can get (can take whatever is contributed) • Capped (project closes at set amount) • Uncapped (as much money as you can get)
Reasonable cost for cash • Many crowdfunding platforms take a % of the money raised to cover their costs (and profit) • A few have a set cost (depending on your raising amount) • A few have no charges (usually for not-for-profit projects) • FINANCIAL PROVIDERS WILL CHARGE YOU TOO! (Paypal, banks, credit card providers, etc)
Legal entity • Personal – Personal tax implications Requires personal bank account • Company – Costs $$ to set up and operate Easier to register domains & protect product names More paperwork I chose company – cost me $570 to set up online: (Social Media Planner Pty Ltd)
Prepare your ‘offer’ • Need to write your offer – what are you creating and why should people back it. • Needs to be clear, punchy and engaging. • Images a BIG plus
Develop rewards • What amounts do you want people to contribute? • Need to know your costs well (DO YOUR RESEARCH!!!) • Remember currency conversion & fulfilment costs (postage, storage, etc) • Include a contingency for cost overruns
Rewards should follow psychology • Entry level ‘tasters’ for people who wish to get involved but not commit • Cheap early bird ‘teasers’ to get money in fast & encourage more backers to get on board • Mid-level ‘stayers’ for people who support what you’re doing / want the product • High level ‘bonuses’ for those who want special treatment
BUT NOT TOO MANY! • There’s no set maximum (or minimum) number, but can be hard to manage 20+ tiers • Also people may be confused by too much choice Veronica Mars movie had 32 reward tiers & raised $5.7m, LifX had 7 and raised $1.3m (then closed it). • Consider ‘stretch’ goals and extra reward tiers if initial tiers get full & you want to raise more cash (games commonly use stretch goals – extra content and features)
Choose your fund raising time period • Usually 30 or 60 days (depends on platform) • How long do you want to let it run / drag out the agony? • There’s normally an option to close early if goal is reached (as LifX did).
Develop a video! • On Kickstarter only 30% of projects without a video get fully funded, vs 50% with a video. • Ergo videos almost double your chance of funding.
Here’s mine… https://www.youtube.com/watch?v=1RlqCtG8PcA
Submit & pray • Some crowdfunding sites don’t review projects – which probably means lots of low quality projects…. • The ones that review can take days or weeks to approve them. • Kickstarter: Up to 3 days EXCEPT Tech & Products, which can take a week or more (one person I know had it take three weeks!) • Approval isn’t automatic – may be asked for more info, to make changes or simply be rejected.
Build your community • Identify super influencers • Prepare emails/tweets/posts • Engage friends & colleagues • Consider a PR professional • Prepare media releases & blog updates • Getting backers early = more likely success
Launch and hope!
Follow up actively! • Tell people you’ve launched • Ask people to share when they back it • Update backers regularly Just don’t overwhelm the Interwebs with messages about your project!
Please tell people you know about my Kickstarter & back it if you can
Thanks! Kickstarter: kickstarter.com/projects/socialmediaplanner/social- media-planner Web: socialmediaplanner.com.au Facebook: facebook.com/SocMedPlanner Twitter: @socmedplanner YouTube: youtube.com/user/SocMedPlanner Flickr: flickr.com/photos/socmedplanner/ Hashtags: #socmedplanner or #socialmediaplanner
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